Introduction: Cost of medicines is a major concern today. Generic drugs provide major saving opportunity in healthcare expenditure since they usually have lower price. However, physicians and patients are apprehensive regarding their quality, although they are bio-equivalents of the innovator products. The present study therefore compares the price structure and antibacterial activity of the branded products and their branded-generic counterparts. Methodology: Commonly used branded and branded-generic versions of three oral cephalosporins available in the pharmacy were studied. Health cost was compared by comparing Maximum retail price (MRP) and price-to-retailers (PTR) and trade margins. The antibacterial activity of the pairs was assessed by “Kirby Bauer” disk diffusion method, by comparing the zones of inhibition. Results: The retailer margin for the three branded medicines was in the range of 17-25% but for their branded-generic versions, it was huge, in the range of 73-130%. By switching over to branded generic medicines cost benefit to pharmacist ranged from 270% to 422% but for patients it was only 5%-48.3%. There was no difference in the zones of inhibition obtained for the branded generic and the corresponding branded drugs, indicating equal effectiveness. Conclusion: Branded generic cephalosporins, equi-effective as the branded versions, with lesser cost to the patient, can be used clinically. However, cost benefit to the patients, being hyped in the media, is very meager compared to the profit margins for the retailers. Steps are needed to ensure that the cost benefit with the use of generics reaches the patients in appropriate amounts.